American treasure and the decline of Spain

Carlos Javier Charotti, Nuno Palma and João Pereira Dos Santos

No 17020, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Spain was one of the world's richest countries around 1500. Two centuries later it was a backwater. We rely on a synthetic control methodology to study the long-run impact of the in ux of silver from the NewWorld since 1500 for the economic development of Spain. Compared with a synthetic counterfactual, the price level increased by up to 200% by the mid-seventeenth century. Spain's GDP per capita outperformed other European nations for around a century, but by 1750, GDP per capita was around 40% lower than it would have been if Spain had not been the first-stage receiver of the American treasure.

Keywords: Dutch disease; Resource curse; Early modern spain; State capture (search for similar items in EconPapers)
JEL-codes: N13 O11 O57 (search for similar items in EconPapers)
Date: 2022-02
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Journal Article: American treasure and the decline of Spain (2025)
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